Financial Crisis News Center

Dodd Introduces Bill to Immediately Freeze Credit Card Interest Rates

This story appeared in Bank Digest.

Senate Banking Committee Chairman Christopher J. Dodd, D-Conn., introduced a bill to immediately freeze credit card interest rates, fees and finance charges on existing balances. The Credit Card Accountability, Responsibility, and Disclosure (CARD) Act, enacted in May, prevents arbitrary interest rate, fee and finance charge increases on a customer’s existing balance. It requires 45 day notification of interest rate increases, and increases from 14 days to 21 days the amount of time before a bill is due that a statement must be delivered. According to a Banking Committee press release, “Unfortunately, credit card companies have been jacking up rates in a last ditch effort to squeeze customers before all of the bill’s provisions can take effect.” Dodd’s bill would force companies to immediately freeze rates, finance charges and fees on existing balances until the remaining provisions in the Credit CARD Act go into effect. “We worked long and hard to enact the safeguards included in the Credit CARD Act,” said Dodd. “But as soon as it was signed into law, credit card companies were looking for ways to get around the protections this Congress and the American people demanded. This bill would end those abuses and further protect customers today.”

http://banking.senate.gov/public/index.cfm?FuseAction=Newsroom.PressReleases&ContentRecord_id=9229fdac-acc8-f78e-3f79-2aed0eb2e24c&Region_id=&Issue_id

Dodd Comments on Executive Compensation Rulings

This story appeared in Bank Digest.

Senate Banking Committee Chairman Chris Dodd, D-Conn., issued a statement on the announcement by Kenneth R. Feinberg, Special Master for Executive Compensation under TARP, on executive compensation. Dodd noted, “In this country, you are supposed to be rewarded for hard work. But for folks on Wall Street to be giving out outrageous compensation packages, in the middle of a recession, as they are being propped up by taxpayer dollars is obscene.” He added, “Mr. Feinberg should keep the pressure on and Congress will revisit what we need to do when we take on financial reforms.”

http://banking.senate.gov/public/index.cfm?FuseAction=Newsroom.PressReleases&ContentRecord_id=82e5e56a-ce05-ca61-0f4e-3dadb648d394&Region_id=&Issue_id

Finance Committee Chairman Comments on SIGTARP Report

This story appeared in Bank Digest.

In response to the quarterly report of Special Inspector General for the Troubled Asset Relief Program Neil Barofsky, Senate Finance Committee Chairman Max Baucus, D-Mont., said that “we now have a good summary from the Special IG of how the Treasury Department is running the program every quarter.” He added that “I am also pleased that the Department decided to follow the Special IG’s recommendation requiring managers for the Public Private Investment Program (PPIP) to disclose all of their assets or exposures to related liabilities, including credit default swaps. I will follow up with the Secretary of Treasury on the Special IG’s ;request that his office be allowed to comment on any change in PPIP compliance rules, and that his office have access to fund manager information maintained by the Treasury Department.”

http://finance.senate.gov/press/Bpress/2009press/prb102109.pdf

SIGTARP Issues Quarterly Report to Congress

This story appeared in Bank Digest.

The Office of the Special Inspector General for the Troubled Asset Relief Program has issued its latest quarterly report to Congress. In this report, SIGTARP attempts to:

• explain the various TARP programs and how the Treasury has used those programs through Sept. 30, 2009;
• provide a description of what ratings agencies do and their role in the market, in governmental decisions and in TARP;
• describe what SIGTARP has done to oversee the various TARP programs since its Quarterly
• Report to Congress dated July 21, 2009;
• and set forth new recommendations and provide updates on past recommendations relating to the operation of TARP.

According to Sen. Chuck Grassley, R-Iowa, “The Special IG has gone to bat for taxpayers and proven that meaningful information can be collected about how TARP dollars have been used.”

Dodd Calls for Extension of First Time Homebuyer Tax Credit

This story appeared in Bank Digest.

Sens. Christopher J. Dodd, D-Conn., and Johnny Isakson, R-Ga., have proposed extending the $8,000 first time homebuyer tax credit through the end of June 2010. Created by the economic stimulus package signed by President Obama in February 2009, the tax credit is set to expire on Nov. 30, 2009. “The credit is set to expire in five weeks,” said Dodd. “But the work of stabilizing the housing market won’t be done. We still need to use every tool at our disposal to try and fix this problem,” Dodd said.

http://banking.senate.gov/public/index.cfm?FuseAction=Newsroom.PressReleases&ContentRecord_id=7324eedc-d893-140b-efa0-4d73af6b4507

Dodd Unveils Overdraft Bill

This story appeared in Bank Digest.

Senate Banking Committee Chairman Christopher J. Dodd, D-Conn., unveiled The Fairness and Accountability in Receiving (FAIR) Overdraft Coverage Act, a bill intended to protect Americans from excessive checking account overdraft fees. Senators Jack Reed, D-R.I., Chuck Schumer, D-N.Y., Sherrod Brown, D. Ohio, and Jeff Merkley, D-Oregon, are original co-sponsors of the bill. “At a time when many can afford it least, American consumers are being hit with hundreds of dollars in penalties for overdrawing on their account by just a few dollars. Banks should not be trying to bolster their profits at the expense of their customers,” said Dodd. “This legislation gives Americans control over their bank accounts--giving them the chance to choose whether they want overdraft protection, establishing strict limits on these fees, and shining more light on these practices.” The bill would:

Banking Groups Urge Senate Lawmakers to Oppose Single Bank Regulator

By Sarah Borchersen-Keto, CCH Washington News Bureau, Contributing Author, the CCH Federal Banking Law Reporter.

The American Bankers Association and the Independent Community Bankers of America are urging Senate lawmakers not to move ahead on a proposal to create a single bank regulator, arguing that a bad decision taken by a single regulator could potentially have a “catastrophic” outcome.

Senate Banking, Housing and Urban Affairs Committee Chairman Sen. Chris Dodd, D-Conn., wants to create a single regulator, insisting that it would eliminate the overlaps and red tape created by the “current alphabet soup” of regulators.

Senate Banking Subcommittee Examines Securitization

John M. Pachkowski, J.D., Editor, CCH Federal Banking Law Reporter and Bank Digest; Author, Anti-Money Laundering and Bank Secrecy: Compliance and the USA PATRIOT Act; Co-Author CCH Financial Privacy Law Guide.

At an Oct. 7, 2009, hearing held by the Senate Banking Subcommittee on Securities, Insurance, and Investment, the topic of asset securitization was discussed by a panel of witnesses of representing academia and the securitization industry.

Professor Patricia A. McCoy, University of Connecticut Law School discussed inherent flaws in private-label mortgage securitization and needed reforms, such as the need to realign incentives and improved due diligence by investors.

Testimony provided by George P. Miller, Executive Director, American Securitization Forum addressed: the role and importance of securitization to the financial system and U.S. economy; current conditions in the securitization market;  limitations and deficiencies in securitization revealed by the recent financial market crisis; and views on certain securitization policy and market reform initiatives now underway or under consideration.

Dodd Calls on Credit Card Companies to Follow BofA’s Commitment

This story appeared in Bank Digest.

Senate Banking Committee Chairman Christopher J. Dodd, D-Conn., called on credit card companies to follow Bank of America's commitment to not raise interest rates or change terms on customers until consumer protections included in the Credit CARD Act go into effect. In a letter to Dodd, the director of Bank of America's Federal Government Relations wrote that the bank would not implement any changes to consumer credit card accounts prior to the effective date of the Credit CARD Act. “Every other credit card company should follow suit,” said Dodd. “This Congress has made it clear that abusive credit card practices are no longer acceptable.”

Securities Industry Concerned About Consumer Financial Protection Draft, Supports Draft Creating Federal Fiduciary Standard for Brokers and Advisers

By James Hamilton, J.D., LL.M., Principal Analyst, CCH Federal Securities Law Reporter; and CCH Derivatives Regulation Law Reporter.

The securities industry fears that draft legislation creating a Consumer Financial Protection Agency with broad new powers could inadvertently encroach on the jurisdiction of the SEC and CFTC. In testimony before the House Small Business Committee, The Securities Industry and Financial Markets Association (SIFMA) also said it favors draft legislation creating a new uniform federal fiduciary standard for brokers and advisers. However, SIFMA opposes the piece of the draft authorizing the SEC to prohibit pre-dispute arbitration clauses in broker-dealer and investment advisory agreements with retail customers.